Trading and Investment Companies will Increase Consumption of Cloud Services: Study Confirms
4883
Of your peers have already read this article.
3:00 Minutes
The most insightful time you'll spend today!
While some traditional financial services companies have more slowly transitioned to the cloud, capital markets firms have embraced cloud computing across their entire value chains — front-, middle-, and back-office. We wanted to understand the dynamics behind this rapid adoption, the most common use cases, and the types of technology most in use, particularly as it relates to market data. Google Cloud commissioned Coalition Greenwich to survey 102 institutional capital markets professionals — at exchanges, trading systems, data aggregators, data producers, asset managers, hedge funds, and investment banks — in the United States, Canada, France, Germany, Italy, the Netherlands, Switzerland, and the United Kingdom.
Our research found that while there are many drivers, demand for easier accessibility is fueling widespread adoption of cloud-based market data services, and associated trading infrastructures, across the buy side and sell side. In fact, 68% of sell-side and buy-side users find it critical for market data providers to offer public cloud-based data services. At the same time, exchanges, market data providers, aggregators, and trading systems are embracing the cloud as a delivery model by offering access to data directly via their own cloud services, APIs or partners.
Here were five noteworthy takeaways from the study:
1. Cloud services are becoming ubiquitous for data delivery. Today, the cloud is pervasive, with 93% of exchanges, trading systems and data providers offering cloud-based data and services, according to surveyed executives. Moreover, 100% of those surveyed intend to offer new cloud-based services, such as derived data, in the next 12 months.
2. Commercial and investment banks are offering additional connectivity, real-time data feeds, and trading applications delivered via the cloud,demonstrating that it’s not only exchanges, trading systems, and data providers that are moving rapidly to the cloud. Internal use cases abound as well, with 67% of those surveyed consuming cloud-deployed market data, primarily for data analytics. 88% of surveyed sell-side firms intend to consume cloud-based market data services, with digital transformation, data science and quant research as the top use cases.
3. Buy side firms will consume even more cloud-deployed data. Today, 90% of surveyed buy-side firms are consuming cloud-deployed market data, mostly for portfolio management. 70% of buy-side firms intend to consume more public cloud-based market data services in the next 12 months, adding services such as compliance and regulatory reporting.
4. AI/ML, powered by cloud, is moving out of the pilot phase and into mainstream use. Today, 50% of exchanges, trading systems, and data providers are offering data products or services powered by AI/ML, and of those, 42% intend to offer AI-powered trade execution and trading analytics services in the next 12 months. Within commercial and investment banks, 55% said they are currently using AI/ML in the cloud, and while that was true for only 14% of overall buy-side respondents, 44% of large buy-side respondents are using it.
5. Exchanges, trading systems, and data providers are prioritizing public cloud for internal insights. 71% of these firms are using the public cloud, mostly for data transmission, processing, analysis, and long-term data storage. Over the next 12 months, 33% of new public cloud workloads will focus on data mining, data insights and advanced analytics, while 28% of new AI/ML tooling and infrastructure investments will focus on faster analytics and risk reviews, and 27% on data quality maintenance.
“We see new, dramatic shifts on the adoption of cloud across market data,” said David Easthope, Senior Analyst for Coalition Greenwich. “And we expect further proliferation of cloud-based services and greater consumption across the trading and investing lifecycle.”
Conclusions and future predictions
Based on the survey results, Coalition Greenwich predicts five following trends over the next 12 months:
- Exchanges and trading systems will continue to launch a wide array of new cloud-based and possibly cloud exclusive data services across derived data, end of day data, reference data and pricing data.
- Data providers will launch new data products such as pre-trade analytics powered by AI/ML in the cloud.
- Commercial and investment banks will offer additional connectivity, real-time data feeds, and trading applications delivered via the cloud.
- Buy-side firms will consume even more cloud-deployed data, including real-time market data, portfolio management data, and risk analytics.
- Exchanges, trading systems and data providers will explore proof-of-concepts around core systems on the cloud. Improvements to AI/ML tooling or infrastructure will ramp up as firms seek more rapid responses to risk initiatives.
To learn more about these findings, download our two full reports, The Future of market data: Distribution and consumption through cloud and AI and Exchanges and data providers: Prioritizing the cloud and AI for internal insights or our short infographic.
Research methodology
The survey was conducted online by Coalition Greenwich on behalf of Google Cloud from March 2021 to April 2021 among 102 executives in North America (n=82), EMEA (n=17) and other (n=3) who are employed full-time and who are participants or influencers in decisions around cloud and/or senior management with a role at a company which is an institutional asset manager, hedge fund, alternative investment manager, exchange and/or trading system, information provider, information aggregator, or other asset manager/asset owner. The survey included wide perspectives from a range of firm size and asset class focus, including equity, fixed income, FX, commodities, multi-asset, and other asset classes.
Foot Notes
1. We defined market data as direct feeds, consolidated feeds, terminal and desktop products, security and reference data, pricing data, historical data, alternative data, and index data.
TVG Network Turns to Google Cloud and Saves $0.5 Million a Year
3626
Of your peers have already read this article.
2:30 Minutes
The most insightful time you'll spend today!
Google Cloud Results
- Maximizes revenue by allowing customers to place bets faster and more confidently
- Scales for major racing events with 80% less IT involvement and up to $500,000 annual savings
- Improves time to market for new product releases by more than 30x
- Helps enable richer mobile experiences to keep fans engaged
- Processes up to 6,000 bets per minute
The first Saturday of May is the biggest horse racing event in North America each year. Minutes before the race, millions of dollars in online bets will flow in through advanced deposit wagering (ADW) operators such as TVG Network. For TVG’s IT team, it’s a high-stakes game: If wagering systems can’t handle thousands of requests per second, revenue and customers will be lost.
To avoid downtime before a major race, TVG used to bombard its systems with ad-hoc load tests a month in advance. Before each big race event, a team of seven people spent eight hours a week deploying new infrastructure and testing various scenarios. But with complex legacy systems and manual processes, the team’s efforts could only go so far. If an unexpected system issue or undetected bottleneck was found during the run-up to the big race, all bets were off.
After a brush with downtime in 2016, TVG decided to move its ADW application to the cloud, taking the opportunity to rewrite the application to take advantage of modern, container-based architectures. After a short period of development on a different cloud services provider, TVG moved to Google Cloud Platform using Google Kubernetes Engine to automate container management and orchestration.
“We chose Google Cloud Platform because it was the most reliable, cost-effective, and automated cloud solution available,” says Tim Morrow, CTO at TVG Network. “We get better security, strong compliance, and the peace of mind that when the biggest race day rolls around, we won’t have any downtime.”
Placing the right bet
Moving to Google Cloud Platform gives TVG a variety of options in different regions and availability zones to satisfy regulatory requirements. Google Cloud Platform offers continuous availability and transparent maintenance, with no scheduled downtime or patching requirements.
“For our online wagering site, we prefer Google’s philosophy of continuous availability and live migration,” says Tim. “Having to plan for scheduled downtime of cloud instances just seems ridiculous in this day and age. And with Google Cloud Platform, we get much more consistent performance as we scale.”
To keep its IT team focused on value-added tasks, TVG uses Google Cloud managed services such as Cloud Bigtable, a highly scalable NoSQL database, as well as Cloud Storage for backups and Cloud Pub/Sub for real-time messaging between applications.
“We like the software-defined nature of Google Cloud Platform,” says Saeid Vafaeisefat, Vice President of IT, TVG Network. “The managed services are so easy to use. Google Cloud Platform even helps us mitigate and absorb distributed denial of service attacks with its global load balancing features, which we don’t pay extra for.”
TVG worked with SADA Systems, a Google Cloud Premier Partner, for consulting and deployment assistance. “SADA Systems helped us gain a deeper understanding of the advantages of Google Cloud Platform so we could make better decisions about how our application would perform and scale,” says Saeid. “They provided the facilitation, follow-up, and expert advice we needed to make our deployment a success.”
Scaling with 80% less work
With an active-active cloud architecture spanning multiple regions and the ability to conduct continuous, automated load tests, TVG no longer worries about downtime during major racing events—or any time, for that matter. Infrastructure and tools that used to be required to scale and provide resiliency are no longer needed, reducing CapEx. And with autoscaling replacing human intervention, accidental downtime is much less of a concern.
“With Google Cloud Platform, we can scale for major racing events with 80% less IT involvement and up to $500,000 annual CapEx savings,” says Tim. “Google Cloud Platform gives us faster deployment—we’re releasing new enhancements to our wagering site four times a week instead of every two months.”
More profitable user journeys
TVG’s success is being driven by ongoing modernization made possible in part by Google Cloud Platform, with TVG becoming the first U.S. operator to launch native iPhone and iPad apps. Lower latency means that stale data is never an issue, allowing customers to place bets faster and more confidently from anywhere they happen to be—which generates more revenue for TVG.
“Being on Google Cloud Platform has allowed us to develop our customer-facing channel faster while focusing on automated deployment and immutable infrastructure,” says Tim. “We have far greater confidence in our platform, and last year we broke records on our major race days while delivering an excellent customer experience.”
Mrs. T’s Pierogies Moves SAP Systems to Google Cloud for Faster Analytics Capabilities for its SAP Data
6842
Of your peers have already read this article.
1:30 Minutes
The most insightful time you'll spend today!
Pierogies might just be the ultimate comfort food. But when Mrs. T’s Pierogies — the leading manufacturer of frozen pierogies in the US — learned it needed to transition its existing on-premises SAP ECC to S/4HANA, the company sought a little comfort for itself.
Founded in 1952, Mrs. T’s Pierogies now produces more than 650 million pierogies a year. Moving that many pierogies requires a powerful ERP system — and an equally powerful IT infrastructure on which to run it. Mrs. T’s realized that the SAP-mandated transition of its ERP solution to SAP S/4HANA was an opportunity to move its SAP systems to Google Cloud and gain real-time analytics capabilities for faster sales forecasting, more effective trade promotions, and more sophisticated planning.
From necessity to opportunity
Mrs. T’s successfully ran its SAP ECC solution on its own on-premises servers for years. But after SAP decided to sunset the product, Mrs. T’s realized that it faced multiple challenges, including:
- Migrating its SAP ECC 6.0 system from an on-premises leagcy OS to a cloud-based Linux environment
- Moving data from its SAP DB2 database to HANA
- Transitioning from ECC to SAP S/4HANA
That complex transition needed to take place with little or no downtime, since nearly all of the company’s invoices, warehouse movements, and transfer orders used the Electronic Data Interchange (EDI) protocol. Missing even a few hours of EDI transactions would put significant revenue at stake. Adding to the challenge: Some Mrs. T’s customers would not accept an invoice past five days, which left little room for error. Mrs. T’s chose Rackspace Technology, a longtime Google Cloud partner, to oversee the move.
Mrs. T’s could have chosen to run S/4HANA on its legacy hardware but saw migration to Google Cloud as an opportunity to improve key aspects of its business, in particular data analytics. Historically, sales planning and forecasting involved time-consuming manual processes. But the speed, availability, and scalability of Google Cloud meant that Mrs. T’s could take advantage of S/4HANA’s embedded analytics capabilities. Migrating could also open the door to leveraging Google Cloud’s native integration of SAP data to power Google tools such as BigQuery, Google Cloud AI Building Blocks, and more.
The move to Google Cloud also gave Mrs. T’s an opportunity to update its disaster recovery process. Previously, the company backed up to tape. So, if its SAP systems went down, a member of the IT department would have to drive the most recent tape backups an hour to its cold site, where the disaster recovery partner would load the SAP backup tape, boot the system up, switch network connections to that site, and cross their fingers. Not only would downtime be significant, but restored data would be limited to the periodic tape backup.
“Everything just worked”
Once Mrs. T’s decided to migrate to Google Cloud, the company worked with Rackspace Technology to implement the system. The first phase focused on moving the SAP production environment from on-premises infrastructure to Google Cloud and updating its database to HANA, which took place over 12 weeks. The switchover occurred over a weekend and was all but invisible to users. “We came in on Monday and everything just worked,” recalls Timothy Coyle, Director of Information Systems & Technology. In a second four-month phase, the company transitioned from ECC to S/4.
The move to Google Cloud paid dividends immediately. Batch transactions occurred twice as fast and on-screen end-user transactions rendered instantly. The upgrade also gave the finance team access to embedded analytics and monitoring for the first time. With everything now in the cloud, disaster recovery could be dynamic and nearly instantaneous, with a worst-case scenario of just 5 to 10 minutes of downtime.
“Mrs. T’s needed a skilled and experienced partner that could move its SAP environment to Google Cloud with no negative impacts to its business. We knew this migration was a key initiative in Mrs. T’s digital transformation journey,” says Chuck Britton, Google Partner Development Manager at Rackspace. “We also knew that running SAP on Google Cloud would give the business the fast and flexible analytical capabilities it needed for its SAP data.”
From ideation to production, Mrs. T’s migrated from its legacy on-premises infrastructure to a modern SAP S/4HANA solution on Google Cloud in only seven months, with minimal downtime and zero disruptions. Now that the migration is complete, Mrs. T’s has a flexible, highly scalable environment to run the SAP applications and data that fuel the business. Says Coyle, “Our strategic intent for IT is to make processes simpler, people more productive, and infrastructure more secure. This project fits right square in the middle of that strategic philosophy.”
Learn more about ways in which Google Cloud can transform your SAP experience and about Rackspace Google Cloud solutions for SAP customers.
4694
Of your peers have already watched this video.
10:30 Minutes
The most insightful time you'll spend today!
How Google’s Customer Data Platform Helps Retail Brands Offer Data-driven , Personalized CX
Retail companies need customer insights to deliver personalized experiences that impact revenue generation and cost savings. Watch how Google Cloud’s customer data platform helps brands integrate and build holistic view of data in silos to drive marketing and customer service success.
1097
Of your peers have already downloaded this article
5:30 Minutes
The most insightful time you'll spend today!
In this whitepaper, we outline migration frameworks that we built based on conversations we’ve had with CIOs, CTOs, and their technical staff. The goal of these frameworks is to help you devise a migration strategy that empowers both IT and the business.
Learn how to analyze migration strategies for your business, including:
- Moving up the stack before you migrate
- Migrating workloads into the cloud (mostly) as is
- Optimizing and modernizing workloads once you’ve migrated
11225
Of your peers have already watched this video.
1:30 Minutes
The most insightful time you'll spend today!
Indian Retailer Figures Optimizes Hyperlocal Delivery to Increase Customer Experience
Anyone who follows the Indian e-commerce scene knows that one of the largest challenges these companies face is hyperlocal delivery.
That was a problem facing Wellness Forever, a retail chain of pharmacies with 150-plus stores across India.
“Exactly a year ago, we started our journey of hyperlocal deliveries. This optimization was a big time challenge for us to understand how to optimize this,” Palani Subbiah, CTO, Wellness Forever.
The problem in front of Wellness Forever was to identify which customer could can be sold from which store, so that a delivery could be made within 90 minutes.
“We handle a large amount of customer data and we wanted to use insights to help and improve the customer satisfaction index,” says Subbiah.
To do that Wellness Forever leveraged Google Big Query to run massive amount of data to come up with the operational insights. They also used Firebase and Google Maps.
“By 2021, we are going to have about 450 stores. Those stores are going to be not only a physical store, which is a digital store.
More Relevant Stories for Your Company
Google is named a Leader in 2020 Magic Quadrant for Cloud Infrastructure and Platform Services
The capability gap between hyperscale cloud providers has begun to narrow; however, fierce competition for enterprise workloads extends to secondary markets worldwide. Infrastructure and operations leaders should evaluate cloud providers with a broad range of use cases and a wide market presence. Market Definition/Description Cloud computing is a style of
Hybrid Work with Google Workspace: What Customers can Expect
In June, we shared our vision for navigating the future of hybrid work with a single connected experience in Google Workspace. Now, as many of our customers begin to embark on their own hybrid journeys, I wanted to share how we’re helping them bridge the gaps in this new way of
Your DW Need Scaling Up? Try What This Company Did: It Can Run 25,000 Events a Second
With access to more data than ever before, companies have never been better positioned to adopt precision marketing methods and target the right customers at the right time. Emarsys, a digital marketing platform, enables its clients to collect, analyze, and act on a wide variety of data. From websites to mobile
The Fantastic Story of How BMG Enables a Micropayments Strategy So Music Artists Get Paid
The music industry is rapidly changing. Only 20 years ago, the availability of music and the infrastructure that was required to make an album a sales success were incredibly complex and expensive. With the decline of physical sales and a fundamental shift to digital, music streaming now accounts for more
